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8. You notice that all your neighbors seem to need various items (e.g., tree limbs, construction debris) hauled away. You are thinking of buying a
8. You notice that all your neighbors seem to need various items (e.g., tree limbs, construction debris) hauled away. You are thinking of buying a dump truck for $80,000. You estimate you could generate annually $30,000 a year cash flow (end of year). However, in the first year you expect cash flow to equal $0. That is, the first $30,000 of cash flow will start at the end of the second year. The estimated life of the truck is 8 years with no salvage value. You would like an annual return of 12%. Should you buy the dump truck? |
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